Why Is NYCERS Spending over Twice as Much As Other Pension Plans?

CEM Cost Study of NYCERS Pension Administration

Admin Cost Study From the Report

At the September 2026 NYCERS Board Meeting there was a presentation by CEM analyzing the NYCERS's administrative costs for FY-2025. See the report.

CEM Benchmarking is a global data analytics and independent benchmarking firm that compares the costs, performance, and operations of institutional investors, pension funds, sovereign wealth funds, endowments, and foundations.

In particular specializing in administration benchmarking:

• Measures the cost and quality of pension administration (front, middle, and back-office operations, call centers, and digital services)

In recent years NYCERS has contracted with CEM to do annual cost analysis on NYCERS expenses.

CEM puts together a peer group of 14 other similarly situated public pension plans and matches up NYCERS characteristics with the characteristics of the peer group. See page 2 of the excutive summary for the list of the plans in the peer group.

It appears that CEM has been producing these repots for NYCERS since 2018. See chart on page 1-1.

Stark Conclusion from the Report

"Your total pension administration cost of $349 per active member and annuitant was $202 above the peer average of $147."

Not suprisingly, there weere no questions from the trustees after the presentation.

Details of the $349

NYCERS spent $128,884,000 in FY-2025 with $66,036,000 for PS costs and %62,848,000 for OTPS costs.

CEM broke this down into $101,322,000 for :business as usual" costs and $$27,562,000 for major project costs.

The break down for $349 amount was into the two components:

• $274 for business-as-usual costs conpared to $127 for the peer group and
• $75 for major project costs compared to #20 for the peer group.

CEM atributes the variance in cost per membership to the following items: (see page 4 of executive summary)

• high staff levels - $81 -(521 personnel),
• third party costs - $66 - ($40,253,000), and
• high major project costs - $62 -($22,427,000)

Unfortunately there is no mention in the report about the details of the major projects and there was definitely no mention of the Legacy Replacement Projecy in the CEM report.

History of Variances

NYCERS History of CEM Report

--Year--	NYCERS	Peer Group	Variance
2018	$174	$84	$90
2022	$297	$93	$204
2023	$296	$97	$199
2024	$357	$105	$252
2025	$349	$147	$202

NYCERS Staff Allocation in FY-2025

The CEM report has a chart on page 4-51 which lists the staff allocations and payroll cost.

The Legacy Replacement Project Is Still Dark as of the September Trustee Board Meeting

Since March 2026 the NYCERS Trustees have been ignoring the the Legacy Replacement Project fiasco.

The Febraury Board meeting was the last time there was any mention of the LRP project.

It is clear that the trustees are now hiding this problem from the public.

FY-2027 - NYCERS Admin Budget - Details

Intro

On May 12, 2026, with the chaos of the Legacy Replacement Project hanging over their heads, the NYCERS trustees adopted the regular administrative budget for FY-2027. The total budget was a -4.22% decrease from the FY-2026 budget.

The PS amount went from $55.9 million to $54.9 million.

• The payroll was cut by $1.0 million by reducing overtime from $3.6 million to $2.6 million.
  
• Of course, that is a sham because NYCERS doesn't need $2.6 million for overtime, never mind $3.6 million.

The OTPS (non payroll) expenses were reduced by approximately $5.7 million from $92.3 million to $86.6 million mostly from the Tech - Modernization and Implemetation code.

• Contract Services cut from $33.3 million to $29.0 million
• Contigency Reserve cut from $5.5 million to $4.0 million

What was actually spent in FY-2025

NYCERS has a persistent habit of underspending its budgeted appropriations.

In FY-2025 NYCERS spent:

• $66.0 million on PS and fringe expenses but was appropriated $70.0 million, and
• $62.9 million on OTPS expenses but was appropriated $95.9 million.

This is a clear sign of sloppy budgeting and poor execution of plans. Of course, we already know that

Details on the OTPS Cuts

In response to whatever has been decided about the LRP project,
the Accenture LRP contract for FY-2027 was increased from $10.8 million to $17.7 million, and
the QA Vendor contract was kept steady at $1.4 million.
NYCERS is still looking at a publically unresolved project running out to FY-2030 without any published implementation plan.
You will notice below that NYCERS has cut the LRP Risk Consultant from the budget. What was that person doing all these years since 2021.

The following Items were cut completely from the FY-2027 budget

1. LRP Risk Consultant: $700K
2. Accountatnt: $417K
3. Server Consultant: $940K
4. Salesforce Developer: $762K
5. Java Developer: $500K
6. Tech Architect: $250K
7. Commo Consultant $500K

The following items were cut back in the FY-2027 budget

1. Gartner: $840K
2. Data Analysts: $250
3. Project Manager: $500K
4. Cobol Programmers: $2.5 million
5. Procurement Support: $187K
6. Server Engineer: $250K

History of NYCERS Admin Budget 1980-2027

Fiscal Year	F/T Count	P/T Count	College Aides / Hourly	PS Budget	OTPS Budget	Fringe	Total	% Increase
2027	506	26	10	$54,860,521	$86,623,375	$17,347,446	$158,831,342	-4.22%
2026	501	30	16	$55,860,520	$92,309,697	$17,663,655	$165,833,872	-0.13%
2025	485	30	16	$53,679,194	$95,900,865	$16,461,953	$166,042,012	0.05%
2024	485	30	16	$54,290,508	$98,040,138	$13,633,903	$165,964,549	13.37%
2023	485	30	16	$43,016,089	$90,436,500	$12,942,144	$146,394,733	7.92%
2022	474	27	16	$38,397,943	$85,531,063	$11,719,465	$135,648,471	37.94%
2021	438	27	16	$36,842,549	$50,210,145	$11,283,945	$98,336,639	7.10%
2020	438	27	16	$35,262,139	$45,862,557	$10,689,350	$91,814,046	4.97%
2019	428	35	0	$33,592,612	$43,532,302	$10,344,565	$87,469,479	39.44%
2018	411	35	0	$31,704,410	$21,832,718	$9,194,015	$62,731,143	3.55%
2017	401	35	0	$31,056,080	$20,916,796	$8,605,288	$60,578,164	4.81%
2016	392	35	0	$30,233,989	$19,407,619	$8,155,517	$57,797,125	4.70%
2015	392	5	30	$29,131,972	$18,154,572	$7,915,476	$55,202,020	3.68%
2014	383	5	30	$26,813,635	$18,761,240	$7,669,819	$53,244,694	2.18%
2013	380	5	20	$26,623,635	$17,951,822	$7,532,499	$52,107,956	1.93%
2012	372	12	0	$25,756,827	$18,781,428	$6,603,649	$51,122,139	1.14%
2011	372	12	0	$26,046,827	$18,492,228	$6,006,573	$50,545,628	2.76%
2010	372	12	0	$26,046,827	$17,777,228	$5,362,640	$49,186,695	1.88%
2009	371	13	0	$25,189,842	$18,208,861	$4,879,903	$48,278,606	6.22%
2008	371	13	0	$23,597,857	$17,259,313	$4,799,066	$45,656,236	10.80%
2007	364	13	0	$22,616,783	$14,258,471	4,375,788	$41,251,042	5.73%
2006	342	13	30	$20,255,911	$14,683,855	$ 4,076,823	$39,016,589	1.01%
2005	342	13	30	$19,737,687	$14,851,355	$3,887,624	$38,476,666	295.25%
****
1980	219	0	0	$3,558,977	$1,079,851	na	$4,638,828	na
1981	222	0	0	$3,507,806	$1,020,374	na	$4,528,180	-2.39%
1982	220	0	0	$3,970,212	$1,177, 748	na	$5,147,960	13.69%
1983	224	0	0	$4,429,362	$1,230,672	na	$5,660,034	9.95%
1984	231	0	0	$5,026,847	$1,194,237	na	$6,221,084	9.91%
1985	239	0	0	$5,446,600	$1,241,976	na	$6,688,576	7.5%
1986	247	0	30	$5,916,793	$1,423,743	na	$7,340,536	9.76%
1987	245	0	30	$6,621,803	$1,881,300	na	$8,167,220	11.26%
1988	265	0	30	$6,621,803	$1,881,300	na	$8,503,103	4.11%
1989	285	0	30	$7,849,731	$1,932,351	na	$9,782,082	15.4%
1990	280	0	30	$8,284,883	$2,578,693	na	$10,863,576	11.06%
1991	229	0	30	$6,826,473	$2,475,205	na	$9,301,678	-14.38%
1992	225	0	30	$6,646,549	$2,216,262	na	$8,862,811	-4.72
1993	223	0	30	$6,858,991	$2,198,882	na	$9,057,873	2.20%
1994	194	0	30	$6,778,541	$2,183,101	na	$8,961,642	-1.06%
1995	167	0	30	$6,202,062	$2,080,504	na	$8,282,566	-7.58%
1996	154	0	30	$6,199,709	$2,573,715	na	$8,773,424	5.93%
1997	200	0	30
1998	230	0	30
1999	270	0	30
2000	290	0	30
2001	320	13	30
2002	320	13	30
2003	334	13	30
2004	334	13	30

US Income Inequality - IRS 2023 Tax Data - Publication 1304

In April this year the IRS released the tax data for 2023, a year late. It should have been released in the Spring of 2025.

You can make your own guess about why it was late.

2023 IRS Tax Data

Individuala and families filed 160,602,107 returns in 2023.

The total US adjusyed gross income (AGI) in 2023 was $15.286 trillion.

Over 2 million filers had no income (AGI).

Total income tax collected in 2023 was $2.109 trillion.

2023 IRS Tax Data

Range of Earnings	Number of filers	% of Fiers	Amount of AGI	% of AGI	Avg. Annual Income (AGI)	Taxable Income	Amountof tax	% tax of Taxable	% tax of AGI
			(in trillions)			(in trillions)	(in billions)	Income
No AGI income	2.180,146	1.4%	-$0.144	0%		$0.0	$0.0	0%	0%
$1 to $50,000	77.373,223	48.1%	$1.867	12.10%	$24,137	$0.594	$59.4	10.01%	3.18%
$0 to $50,000	79,553,369	49.5%	$1.723	11.16%	$21,863	$0.595	$59.5	10,03%	3.45%
$50,000 to $100,000	39,911,352	24.8%	$2.852	18.5%	$71,462	$1.880	$211.0	11.22%	7.40%
$100,000 to $200,000	27,602,745	17.2%	$3.818	24.8%	$138,330	$3.024	$409.5	13,54%	10.72%
$200,000 tp $500,000	10,966,828	6.8%	$3.153	20.4%	$287,872	$2.756	$507.6	18.42%	16.10%
$500,000 to $1,000,000	1,779,729	1.1%	$1.194	7.8%	$671,417	$1.091	$267.5	24.52%	22.28%
$1,000,000 to $1,500,000	368,931	0.2%	$0.443	2.9%	$1,202,551	$0.405	$112.5	27.77%	25.35%
$1,500,000 to $2,000,000	147,290	0.1%	$0.252	1.7%	$1,717,044	$0.230	$66.8	29.10%	26.45%
$2,000,000 to $5,000,000	203,229	0.1%	$0.602	3.9%	$2,965,389	$0.544	$162.8	29.90%	27.02%
5,000,000 to $10,000,000	49,252	0.00031%	$0.336	2.2%	$6,827,469	$0.302	$90.5	22.91%	26.89%
$10,000,000 or more	30,392	0.00019%	$0.907	5.9%	$29,882,856	$0.799	$220.8	27.64%	24.32%
$500,000 or more	2,578,814	1.5%	$3,738	24.23%	$1,449,653	$3.371	$920.9	27.32%	24.63%
$1 or more Totals	158,421,962		$15.430		$97,399	$11.625	$2,108.6	18.14%	13.79%
Grand Totals	160,602,107		$15.286		$95,179	$11.625	$2,108.6	18.14%	13.79%

Runaway Capitalism

Capitalism is driven by greed. It has no moral core. A democratic society needs to protect itself from the inequalities and the damage documented in the chart above.

The botton 49.5% of filers earned only 11.16% of the total of the US adjusted gross income in 2023.
That translates into an annual earnings of $21,663 per filer.

The top 1.5% of the filers earned 24.93% of the total of the US adjusted gross income in 2023.
That translates into an annual earnings of $1,449,653 per filer.

This disparaty is politically and economically dangerous. Just ask the French peasants and nobility of 1789.

The US government can not directly balance the incomes of its populace but it can construct a tax structure that does restore some balance to this inequality.

Congressional Budget Office - FY-2023 Deficit

Along with this income inequality, the Congressional Budget Office (CBO) published data that showed that the federal budget had a $1.7 trillion deficit in FY-2023. The details are as follows:

Expenses = $6.1 trillion

1. Social Security = $1.3 trillion
2. Medicare = $839 billion
3. Medicaid = $616 billion
4. Other = $520 billion
5. Non-Defence = $917 billion
6. Defense = $1.253 trillion
7. Interest = $659 billion

Revenue = $4.4 trillion

1. Income Tax = $2.2 trillion
2. Payroll Taxes (FICA) = $1.6 trillion
3. Corporate Taxed = $420 billion
4. Custom Duties = $0
5. Other = $229 billion

First Cut to Close the Deficit

1. Increase corportate tax to $1.0 trillion (21% to 45%)
2. Increase payroll taxes to $1.9 trillion (collect Social Security tax on all income above the cap like what is done for the Medicare tax)
3. Increase income taxes to $3.0 trillion. (raise the marginal tax rates on income over $500,000 to produce an added $1.1 trillion) The AGI for filers above $500k was $3,738 trillion. These filers paid $921 billion in income taxes, They need to pay $2.0 trillion. That still leaves them with $1.738 trillion ($1.738/2,576,814 = $674,476 avg annual earnings).

Of course, we all know it is unacceptable to increase taxes on the very rich. This is the fundamental political problem in the United States. Everything flows from this obstacle.

Update - The May 12, 2026 NYCERS Trustees Meeting - Admin Budget for FY-2027 - the Phantom Legacy Replacement Project

FY-2027 NYCERS Administrative Budget

At the May 12, 2026 NYCERS Board meeting, the trustees adopted the administrative budget for FY-2027 without any discussion.

After the adoption of the budget, there was a short comment made by the Comptroller's representative about line item "903".

For the general public that is the non-payroll budget component for "Technology - Modernization and Implementation". That is where the costs for the Legacy Replacement Project (LRP) are buried.

The comment was that the trustees should keep an eye on the costs to see that they go down over time.

Reference to "903" is a clear sign of the new found avoidance of mentioning the LRP problems in public session of the Board meeting.

Background on "903"

In the table below you can see annual growth in line item "903" alomg with "902" which reflect the costs for non-mainframe tech work.

I don't have the FY-2027 data yet. I will update when I receive the public budget from NYCERS.

Details on the FY-2027 Budget

I just got the FY-2027 budget figures and you can see from the bottom of the chart that there are major reductions in "903" and "902" going foward.

The trouble is there is no explanation why the costs have gone down. The trustees have taken some action but there is no analysis of what has happened to the LRP project.

The quote below is the only reference to the LRP project in the budget executive summary along the new vague 2030 "completion" date:

NYCERS’ current five-year Strategic Plan, known as Vision 2027, was set to complete at the end of FY 2026, including initial plans for the Legacy Replacement Project (LRP). As of February 1, 2026, NYCERS has completed approximately 70% of the Vision 2027 Strategic Plan, and expects to be 100% complete by the end of Fiscal Year 2026, except for the Legacy Replacement Project, which is now shifting to FY 2030.

The only specific information on the project is that the LRP contract with Accenture was increased from $10.8M in FY-2026 to $ $17.7M in FY-2027.

There is no reference to the promised "revised" scope of the contract.

There is also a question about the cost of the Penfax software license which Accenture is using to build the LRP project.

It is part of the "903" budget code and it has an ongoing annual costcost of $4.0M.

It is projected to disappear in FY-2030 which would collapse the work done on the LRP project.

The only thing left of "903" in FY-2030 is a $3M contingency allocation.

Conclusion

NYCERS and the trustees do not want the public to know how bad this problem is.

Why in heaven's name did the trustees appoint Reyes as the executive director since she has been in charge of the LRP fiasco since 2015.

NYCERS Admin Budget for "903" amd "902"

Fiscal Year	"903" Amounts	"902" Amounts
2019	$18.7M	$5.6M
2020	$18.4M	$9.0M
2021	$19.8M	$11.2M
2022	$55.1M	$11.2M
2023	$56.9M	$13.2M
2024	$61.0M	$15.0M
2025	$54.8M	$19.9M
2026	$43.1M	$24.7M
Projected as of 2025
2027	$60.2M	$33.1M
2028	$41.7M	$34.1M
2029	$35.7M	$35.1M
2030	$17.6M	$36.2M
Adoptef Budget for FY-2027
2027	$37.5M	$24.0M
Projected as of 2026
2028	$28.4M	$24.7M
2029	$36.8M	$25.4M
2030	$3.0M	$26.2M
2031	$0.0M	$26.9M

Note: Executive Session

Earlier in the meeting and prior to entering executive seesion to deal with disability cases, the executive director asked to have the admin budget added to the items to be discussed in executive session. The trustees agreed.

There is a question, however, of whether the budget is a legal item for discussion in executive session. See reference below to the Open Meetings Law.

We can conclude, however, that in the executive session there were discussions about the budget and the LRP issues based on the comment made by the Comptrollers"s representative in open session.

As of today there is no official public notice of the LRP problems, its causes, corrective plan and revised costs for the project. We do have a previous mention of an alleged September 2030 completion date but no new budgeted costs.

There is also no action on how to correct the previous failures or to prevent them from occurriing again in the future.

NYS Open Meetings Law

OPEN MEETINGS LAW

_______________________________________________________________________________________________

PUBLIC OFFICERS LAW, ARTICLE 7

§100. Legislative declaration.
§101. Short title.
§102. Definitions.
§103. Open meetings and executive sessions.
§ 103-a. Videoconferencing by public bodies [Expires and deemed repealed July 1, 2026].
§104. Public notice.
§105. Conduct of executive sessions.
§106. Minutes.
§107. Enforcement.
§108. Exemptions.
§109. Committee on open government.
§110. Construction with other laws.
§111. Severability.

§105. Conduct of executive sessions.

1. Upon a majority vote of its total membership, taken in an open meeting pursuant to a motion identifying the general area or areas of the subject or subjects to be considered, a public body may conduct an executive session for the below enumerated purposes only, provided, however, that no action by formal vote shall be taken to appropriate public moneys:

• a. matters which will imperil the public safety if disclosed;
• b. any matter which may disclose the identity of a law enforcement agent or informer;
• c. information relating to current or future investigation or prosecution of a criminal offense which would imperil effective law enforcement if disclosed;
• d. discussions regarding proposed, pending or current litigation;
• e. collective negotiations pursuant to article fourteen of the civil service law;
• f. the medical, financial, credit or employment history of a particular person or corporation, or matters leading to the appointment, employment, promotion, demotion, discipline, suspension, dismissal or removal of a particular person or corporation;
• g. the preparation, grading or administration of examinations; and
• h. the proposed acquisition, sale or lease of real property or the proposed acquisition of securities, or sale or exchange of securities held by such public body, but only when publicity would substantially affect the value thereof.

2. Attendance at an executive session shall be permitted to any member of the public body and any other persons authorized by the public body

Accountability for Past Failures - Another Interesting AI Question on the Legacy Replacement Project

In addressing the Legacy Replacement failure the AI system reponded to the following question

Question:

Accountability for past failures

Answer:

For past failures, accountability should mean a formal review of decisions, missed warnings, and budget overruns, followed by documented consequences if leadership ignored risks or misrepresented progress. In a project like NYCERS’s legacy replacement effort, that should include named responsibility for schedule slips, failed oversight, weak vendor control, and any avoidable cost growth.

What accountability should cover

Current and former managers should be held to account for:

• Approving unrealistic timelines or scope.
• Failing to surface legacy dependencies early.
• Allowing repeated delays without corrective action.
• Not reporting the true budget impact to trustees or oversight bodies.

Accountability is not just about blame; it is about showing who made which decisions, what they knew, and when they knew it. If management had enough information to see the project was in trouble and still did not act, that is a governance failure, not just a technical one.

What a credible review looks like

A serious review should reconstruct the project timeline, compare promised milestones to actual delivery, and identify where oversight broke down. It should also examine whether internal leadership relied too heavily on the vendor or allowed the program to drift without independent challenge.

If the review finds that warnings were ignored, management should not simply remain in place without consequences. Consequences can range from mandatory corrective plans and performance conditions to reassignment or removal from the project, depending on the severity of the failures.

Budget consequences

Past failure accountability should also include financial responsibility in the sense of disclosure and control, not personal reimbursement. That means reporting the full cost of delays, duplicated support, rework, and contract changes, and then reducing those losses going forward.

The key question is whether management can demonstrate that the same errors will not be repeated. If they cannot, then the case for stronger board intervention becomes much stronger.

AI - NYCERS Trustees - Legacy Replacement Project

Genearl AI querires are now available to everyone. Let's see what answer the AI system (Perplexity) gives to the following question.

Question:

Do you think the trustees are covering up problems with the legacy replacement project?

Answer:

I cannot conclude that the trustees are definitely covering up problems—there is no public evidence of an intentional cover-up—but there are strong transparency red flags that make it reasonable to question whether the Board is being fully open about the Legacy Replacement Project's severity.

What the public record shows

Observation - Why it raises concern

1. Payments to Accenture stopped in FY 2025 ($0 paid after $17.9M in FY 2024)
   - NYCERS' official FY 2025 report does not mention the stoppage at all, even though Accenture holds the LRP contract.

2. April 2026 re-baseline promise not publicly delivered
   - NYCERS said an updated schedule and re-baseline plan would be presented to trustees by April 2026, but LRP was removed from the March and April Board agendas with no public explanation.

3. Project removed from recent Board agendas
   - Up through February 2026, the Executive Director reported on LRP at monthly meetings; in March and April 2026, the problem was "dropped from the board meeting agenda with no mention."

4. Trustees made no public comment on these omissions
   - The blog post explicitly notes: "The trustees have made no comment on the new omissions."

5. Official language is unusually upbeat
   - The FY 2025 report says "the project continues to advance" despite the payment stoppage, missing re-baseline deadline, and external descriptions of the project as a "fiasco" and "disaster."

The blog author explicitly concludes: "I can only assume that the trustees are covering up this disaster." That is a strong claim, but it stems from the pattern above: serious problems, missing disclosures, and silence from the Board.

Alternative (less alarming) explanations

There are plausible non-cover-up explanations that would still be poorly communicated:

• Ongoing contract negotiations or dispute – Management may be working with Accenture (or legal counsel) on a pause, renegotiation, or termination and prefers not to disclose details until terms are finalized.
• Internal re-baseline still in progress – The re-baseline plan may not be Board-ready by April, but management failed to communicate the delay.
• Agenda prioritization – The Board may have removed LRP temporarily due to other priorities, but again failed to explain this publicly.

Even if none of these are cover-ups, the result is the same: trustees are not providing adequate transparency about a high-risk, high-cost project.

Balanced assessment

• Evidence of intentional cover-up?
  Not publicly available. No audit findings, whistleblower reports, or official investigations have concluded that trustees deliberately concealed information. The Comptroller's recent audit letter on NYCERS did not identify LRP as a fraud/waste issue, though it focused on OTPS expenditures and travel approval.
• Evidence of poor transparency and possible downplaying?
  Yes. The combination of zero Accenture payments in FY 2025, the missed April 2026 re-baseline deadline, removal from Board agendas, and no public trustee comment is consistent with either a cover-up or at least a serious failure of oversight communication.

What would change this assessment

Transparency would improve significantly if:

• The Board publicly explains why LRP was removed from the March and April agendas and why no re-baseline was presented in April 2026.
• NYCERS discloses the current contractual status with Accenture and the reason for $0 payments in FY 2025.
• Trustees hold a public, dedicated session on LRP with a realistic schedule, cost estimate (including the ~$43M in secondary costs), and governance plan.

Bottom line

I do not think we can definitively say the trustees are covering up problems without more evidence of intentional concealment.
However, the current handling of the Legacy Replacement Project is consistent with a pattern of insufficient transparency and possible downplaying of a serious crisis, and it is entirely reasonable for members of the public, retirees, and auditors to ask whether the Board is avoiding scrutiny of a failing $84M+ IT project.